T
he real estate industry has been experiencing a shift in commission structures for residential properties, with changes varying across different markets. Redfin's chief economist, Daryl Fairweather, has described this transformation as a "tale of two markets." In slower markets where there's less demand from homebuyers, sellers are still willing to pay buyer's agent commissions to attract potential buyers, and agent fees remain largely unchanged.

    Redfin conducted a survey among agents to understand how the National Association of Realtors' settlement has affected their business since the changes took effect on August 17th. Multiple listing services across the country have eliminated fields for offering compensation to a buyer's broker, forcing agents to obtain buyer agreements before showing properties.

    However, in markets with low inventory and high demand, agents are reporting more negotiations around fees. Sellers are now asking buyers for their best offers on homes instead of proactively offering a commission for the buyers' agent. This could potentially exert downward pressure on fees over time.

    The true impact on fees is challenging to determine as they are no longer visible in MLS listings. Agents have pointed out confusion over the agreements needed before house tours. Some brokerages are requiring shoppers to sign exclusivity agreements, leading prospective buyers to hesitate.

    Buyers and sellers are increasingly negotiating over payment for a buyer's agent, including who should cover the commission. These negotiations are more likely to occur with luxury listings due to the significant amounts at stake for each fraction of a percentage point on commission.

    Despite these changes, sellers are still willing to cover a buyer's agent's fees but are paying close attention to their net profits. Agents are also discussing showing schedules and seller intent regarding commission possibilities.

    According to Boston Premier agent James Gulden in Redfin's report, "Things haven't changed much. The commission is no longer automatically coming from the seller, but most sellers are still open to paying it." However, the dynamics are evolving, and homebuyers are becoming more emboldened due to the rise of digital listing platforms. Sellers feel they have more control over a confusing process.

    In conclusion, brokerages are preparing agents for NAR's D-Day, which marks a significant shift in the way residential commissions are handled. The changes are expected to weed out less devoted real estate agents, leading to a more competitive market for those who remain.